Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


Businesses risk fines for breaching new consumer law reforms

16 June 2014

Businesses risk hefty fines for breaching new consumer law reforms

Companies that don’t comply with new consumer law reform changes risk substantially increased fines and penalties for any breach. The changes, which come into effect today (June 17), will impact virtually all businesses dealing with consumers.

The updated legislation affects the Fair Trading Act 1986 and Consumer Guarantees Act 1993 and will be followed by further changes in March next year.

Richard Smith, a commercial law partner with Duncan Cotterill, says the changes relate to claims that companies make about goods and services, including online sales, and extend to facets such as delivery time post sale or auction. Plain English information on extended warranties is also required.

Backing up claims about goods and services
“Companies need to be able to back up claims that they make about their goods and services. Generally speaking, that means businesses must have reasonable grounds for believing every claim made about their products or services is true. Even if it later turns out that a claim made is true, a breach of the Fair Trading Act still occurs if proof is not obtained before the claim is made.”

Smith says the focus is on the steps taken to substantiate claims but there is no precise test. There is an exception for claims that “a reasonable person would not expect to be substantiated,” which is intended to cover those expressions of opinion that are so obviously exaggerated or overstated that they are unlikely to mislead anyone.

“To ensure on-going compliance, businesses should be reviewing and updating their approach to marketing, and making sure there is a step in the process for checking reasonable grounds are held for any claims being made.

“We suggest:
• Don’t make any claims about your product or service unless you have reasonable grounds for believing them to be true.
• Seek to rely on facts, figures and credible sources of information to back up representations – not guesses and opinion.
• Keep documentation recording the sources you use to back up your claims and of any representations made to customers.”

More changes to come
Smith says that further changes which will come into effect in mid March 2015 relate to any ‘unfair’ wording in consumer contracts. Terms in contracts deemed to be unfair will not be enforceable by businesses

“In the lead up, businesses should review all their standard form consumer contracts to identify any provisions that could potentially be considered unfair. This review could result in substantial changes needing to be made to existing forms of contract and businesses standard terms and conditions.”

ENDS

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Half Empty: Fonterra's 2017 Opening Forecast Below Expectations

Fonterra Cooperative Group raised its forecast farmgate milk payout for next season by less than expected as the world's largest dairy exporter predicts lower prices will crimp production and supply will pick up. The New Zealand dollar fell. More>>

ALSO:

Pest Control: Mouse Blitz Team Leaves For Antipodes

The Million Dollar Mouse project to rid Antipodes Island of mice is underway with the departure of a rodent eradication team to the remote nature reserve and World Heritage Area. More>>

Gongs Got: Canon Media Awards & NZ Radio Awards Happen

Radio NZ: RNZ website The Wireless, which is co-funded by NZ On Air, was named best website, while Toby Manhire and Toby Morris won the best opinion general writing section for their weekly column on rnz.co.nz and Tess McClure won the best junior feature writer section. More>>

ALSO:

Pre-Budget: Debt Focus Risks Losing Opportunity To Stoke Economy

The Treasury is likely to upgrade its forecasts for economic growth in Budget 2016 next week but Finance Minister Bill English has already signalled that more of his focus is on debt repayment than on fiscal stimulus or tax cuts... More>>

ALSO:

Fulton Hogan's Heroes: Managing Director Nick Miller Resigns

Fulton Hogan managing director Nick Miller will leave the privately owned construction company after seven years in charge. The Dunedin-based company has kicked off a search for a replacement, and Miller will stay on at the helm until March next year, or until a successor has been appointed and a transition period completed. More>>

ALSO:

Gordon Campbell: On Electricity, Executions, And Bob Dylan

The Electricity Authority has unveiled the final version of its pricing plan for electricity transmission. This will change the way transmission prices (which comprise about 10% of the average power bill) are computed, and will add hundreds of dollars a year to power bills for many ordinary consumers. More>>

ALSO:

Half Empty: Fonterra NZ, Australia Milk Collection Drops In Season

Fonterra Cooperative Group says milk collection is down in New Zealand and Australia, its two largest markets, in the first 11 months of the season during a period of weak dairy prices. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news